Point & Counterpoint

Senators probing the affairs of the Reconstruction Finance Corp. had a jarring time of it last week. When Banking & Currency subcommittee members asked RFC Director Harvey J. Gunderson why the agency does not lend more money to small business, he had a ready answer. It's up to Congress, he said, "to place the small businessman in a competitive position." Cut the little man's taxes, said Gunderson, and he won't need any federal loans.

The next day, Indiana's Senator Homer E. Capehart nosed into an $18.5 million RFC loan granted to Carthage Hydrocol, Inc. for construction of a synthetic gasoline plant and pipeline in Texas. Republican Stalwart Capehart found that Hydrocol's president is none other than G.O.P. National Chairman Guy George Gabrielson. Passing over the fact that RFC's loan to Hydrocol was more than matched by $21.5 million in new private capital, Capehart snapped: "I don't care whether the name is Smith, Jones or Gabrielson. They ought to practice what they preach. Do they believe in the free enterprise system? Or do they believe in Government control and interference?"

The sad story of bankrupt Lustron Corp. neared its end last week, as far as RFC was concerned. It took possession of Lustron's machinery, equipment, patents and trade name, bought at public auction the week before for $6,000,000. (RFC already owned the plant.) By selling the assets off, RFC thought it might get back a little of the $37.5 million it had poured into Lustron. But at week's end Lustron creditors started a fight to get a cut of the assets. It looked as if the squabble over Lustron's bones might drag on a while longer.

* For other news of Lustron's doings, see NATIONAL AFFAIRS.

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